There is something very special about the game “Hide and Seek”.

Could it be the buzz of not being found or caught? Or is it the palpitations of the “seeker” not knowing how quickly he will find those hiding? Or could it just be the simplicity of the game itself and that is its beauty?

Whatever makes Hide and Seek special for you, it truly has no place in the bridging loan
process. However, many-a-borrower come to the bridging loan table with a similar sense of mystery and discovery, just not the simplicity.

Picture the scenario:

You want to swoop in on a great investment opportunity that requires 3 Million. You put
down 900,000 and you want a lender to give you a bridging loan for 2.1 Million. So far,
so good.

The lender then requests your “Assets and Liabilities Statement”. But guess what you say?

“Come and find me!”

Strangely, though, the lender DOES come to find you but when he gets to your hideout, you are gone. You have decided to change places.

Eventually, the lender becomes exasperated with chasing you for the A & L Statement and, instead, changes tack. After all, he really does want the business. Bridging loan lending is what he does best and is how he makes his money. So he asks you to provide him with “Evidence of Recent and Relevant Experience”, otherwise called a “CV”. But you will never guess what you decide to tell the lender?

Yes … “Come and find me.”

This time, however, the lender decides to not play the game; he says to you, “No – you
come and find me when you have all of the documents that I have asked for. Then I
may just consider giving you a bridging loan because of all the hiding and seeking you’ve
played.”

As much as a lender may want to execute a profitable transaction with you and give you the bridging loan, they value their time much moreso. They genuinely do not have the time to play games chasing down the essential information that they require. After all, 2.1 Million is a lot of money. Would you lend large sums of money to an individual or to officers of a business that are not forthcoming with the most basic of information?

Bridging lenders look for speed. Their whole business is built on the notion of speed. Playing “hide and seek” with your information slows them down tremendously and will likely get you the wrong sort of reputation unnecessarily. Bridging lenders will pass up on your opportunities no matter how fat the profit margin is. And remember: The bridging loan world is a very small place.

It’s fair to say that Warren Buffett can be described as a thoroughbred “money man”. He has made billions of dollars in profits from his investments for close to 60 years.

Yet even with all of this tremendous wealth and experience in making money on his investment projects, Warren Buffett is still extremely cautious when it comes to playing poker.  In fact, his approach to the game goes something like this:

“If you’ve been playing poker for 30 minutes and you still don’t know who the patsy is, then it’s you!”

(By the way, according to the Collins Dictionary a “patsy” is described as being someone that is easily cheated or victimised.)

So, if someone as experienced as Warren Buffett recognises that under certain conditions he does not hold the strongest hand regardless of his past experience in the game, what does that tell a borrower about his (or her) position of strength when they are looking for a bridging loan?

In the decade when credit flowed freely (i.e. 1997 to 2007), it was borrowers who appeared to hold the cards.  Real estate projects were plentiful.  Financiers were all queueing up to get a piece of the action at virtually any price.  The capital markets were constantly on the lookout for projects to fund and this filtered through to all levels in the economy, including bridging loans.

During this time if someone had even a modicum of experience, they could secure a bridging loan very simply indeed.  Actually, bridging loans, mortgages, secured loans … almost all types of finance were available without any trouble.  A borrower could, in effect, take a very short walk to a lender, say their name and if this carried any recognition whatsoever, they would get money.  Just like that; as if by magic.

However, the financial markets have doled out a fundamental lesson to us all, lenders and borrowers alike, which is this:

Money is not meant to be “easy-peasy-lemon-squeezy” to come by.

Forgive the seemingly flippant expression above but that is exactly how many borrowers have become conditioned to regard bridging loans and other forms of raising capital.  Borrowers are meant to demonstrate that they have a truly viable project.  Borrowers are meant to prove that they and their project can pay the lender his interest and return the principal.  Borrowers are meant to show that they, too, are putting their neck on the line and they are willing to share a good amount of risk with the lender.

However, none of this can happen if the borrower believes he holds the strong cards and he has the strongest hand.  But just exactly whose money is it – the Lender’s or the Borrower’s?

As daft as that question may seem, many borrowers need to realise that it is the lender that holds the strongest hand at the moment and, dare we say it, the borrower is closest to being the “patsy”. (Not literally of course but hopefully you get our drift.)  The tables may well turn in future but for now that is the way it is.

Whether it be a bridging loan or any other type of finance that you are looking for at the moment, then borrowers please recognise that you are not in the position of strength in the current market.  Give a lender what he is looking for and, more than likely, you will get the bridging loan that you are looking for.

Welcome to Bridging Loan Direct.

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